Sorry to Dash Your Hopes, But Loan Modifications Are a Scam

I used to be a believer. I drank the kool-aid.  I believed there would be loan loan modifications scamsmodifications for everyone! Any time a homeowner inquired about a short sale, I always asked the question: “Have you applied for a loan modification with your lender?” I thought I was being a good REALTOR® by informing the homeowner of all their options.

Now, I see I was grossly misguided, following the unwritten script from the powers that be. I was very much like the Staples customer service rep, who I have made fun of, who asks each and every time I make a purchase, “Do you have a rewards card with us?”

Now I forego the question: “Have you applied for a loan modification with your lender?” Every homeowner I meet who is struggling to pay their mortgage on their primary residence, has told me they were either denied a modification, or the modification they received was temporary and reduced their mortgage payment by about $150 per month.

To homeowners with high mortgage payments, $150 is not much, and the new payment is only temporary.

The Obama Administration’s plan to punish three of the big banks does nothing to help homeowners who need the help now. Lenders are not required or obligated to modify a borrower’s mortgage. The government made payments to these banks to entice them to modify loans. Haven’t we learned our lesson? It should be a warning: whenever there is free money the result will be disaster.

Only about 3% of American homeowners have been helped by permanent loan modifications.

The government, the banks, REALTORS® and attorneys need to stop confusing homeowners by giving them false hope they can get a loan modification. This has been a political scam to deceive the public, and we who know better should put an end to the lies.

Sorry to dash your hopes, but loan modifications are a scam.

 

Pamela Seley, REALTOR®
CA DRE lic # 01824145 | Dir 951.491.4063 | pamelaseley.com | Getting Your Temecula California Home In Order to Sell | ColorYourUniverse

Serving Southwest Riverside County California| Hemet/San Jacinto Valley, Temecula Valley, Murrieta, Menifee, Winchester, Lake Elsinore, Canyon Lake, Corona, Moreno Valley, Wildomar | Serving South San Bernardino County | Loma Linda, Highland

Find out what your home will sell for in today's market, contact Pamela Seley, REALTOR® at 951.491.4063 today.

rss buttonemail button

All information deemed reliable, but not guaranteed. Copyright © 2009-2013 by Pamela Seley, REALTOR® 

 
This post has been included in California Real Estate News Riverside County, CA Real Estate News Temecula, CA Real Estate News
Post is included in group: EXPRESS WITH WORDS AT ACTIVERAIN
Post is included in group: Politics And Real Estate
Post is included in group: Power of Activerain

16 Comments on Sorry to Dash Your Hopes, But Loan Modifications Are a Scam

JUN
11
2011
183,907 Points 8 Featured Posts Localism Sponsor Outside Blog

No kidding. Isn't this just the saddest thing. Every short sale interview I have, as well, inevitably contains the phrase "we tried to get a loan modification, but ..."
1:54am • #1
657,561 Points 2 Featured Posts Outside Blog Attended Rain Camp Called Shot Master

I really do not understand why anyone or any company or any government would take people and give them hope and then take it away.  It is cruel.
1:57am • #2
466,370 Points 50 Featured Posts Called Shot Master

Gabrielle, I have held out hope, but for nothing. It's time to stop the bs.

Tim, I agree, it is cruel! It would be better to sever the ties and get on with it then pretend homeowners can get a loan modification.
2:00am • #3
621,599 Points 11 Featured Posts Outside Blog Attended Rain Camp Called Shot Master

Sorry to dash your hopes Pamela but this one is worthy of a feature. So that's why I am hitting the suggest button. How can we help people who are strugglling to pay their mortgage when what they think can help them is no help to them at all? I am going to sleep. Have a great weekend Pamela. Great post.
2:04am • #4
466,370 Points 50 Featured Posts Called Shot Master

Lanre, thanks for the suggest! I agree what's been thought to help is of no help at all. Have a great weekend. I'll be working tomorrow! :)
2:06am • #5
156,802 Points 1 Featured Post

I share your conclusion. I haven't met one, not one homeowner who was helped by HAMP. Our politicians already took credit for it but no one is holding them accountable for creating false hope and more opportunity for predators to exploit homeowners who are desperate for help.
2:13am • #6
466,370 Points 50 Featured Posts Called Shot Master

George, you said it clearly! Not one homeowner that I know of has been helped by HAMP. NOT ONE!! You are right, the government has created more opportunity for predators to exploit homeowners, who know they need help.
2:19am • #7
133,635 Points 5 Featured Posts Outside Blog Called Shot Master

Isn't that pitiful? Only 3% of homeowners have been helped?!
3:22am • #8
466,370 Points 50 Featured Posts Called Shot Master

Steve, it is pitiful and sad, especially since it's been advertised how great HAMP is going to be for American homeowners.
3:40am • #9
126,303 Points 2 Featured Posts Outside Blog

Pamela - HAMP was recognized as a scam by most in the lending industry within the first few months.  Even a "permanent" mod is really a balloon loan situation that entails an increase in principal that is typically larger than the monthly savings amounts to.  HAMP is like a 3 card monty game run by the banks with a Heads they Win, Tails you Lose mentality, but Americans are bad at math so the public actually believed government was trying to help them.  Unfortunately, government once again came to the aid of the banksters at the expense of the taxpayer.
1:27pm • #10
466,370 Points 50 Featured Posts Called Shot Master

Ron, What I find ironic about your comment is this: you say "HAMP was recognized as a scam by most in the lending industry within the first few months," and then go on to explain what a permanent mod is. If it's a scam, how can there be any permanent loan modifications? There are none! You just said so yourself it's a scam!

Respectfully, I do not agree with you that Americans are bad at math (unless they are illiterate). What they're bad at is separating the emotional side of their home from a good or poor financial choice. One of my short sale sellers told me today that his lender did him a favor by denying him a loan modification. He applied for one because he wanted to save his home for his wife and children. When I see a wife and mother with tears streaming down her face because they are losing the home she brought her babies to from the hospital and the home with the memories of their children growing up, I know their wanting to keep their home has nothing to do with being good at math.

 

Ask any REALTOR® who speaks with dozens of homeowners and they will tell you there is not one homeowner they have met who has gotten a HAMP loan modification, or a permanent loan modification outside of HAMP. NOT ONE!!

The Obama Administration is just posturing with their "time out" for the three BB's. Remember there's an election coming up and because most Americans are dissatisfied with the performance of our current President they're trying to make themselves look good by "punishing" the banks. The government is using the banks for their own political means. My hope is the American public will see through this bs.

Does anyone think Chase, Wells Fargo and Bank of America, or the government, care about loan modifications? No, because it's all been a scam. The unfortunate part of all this "loan modification" rhetoric is as George mentions above, it opened the door for predators, and many of those predators are real estate professionals and attorneys.

 

 

 

 
4:57pm • #11
136,401 Points 1 Featured Post Called Shot Master

 

Pam....Totally agree with you....most of my listings last year were short sales and they were all “failed loan mods...... this deserves to be featured.....I will suggest.
10:12pm • #12
466,370 Points 50 Featured Posts Called Shot Master

Aida, same experience here. After listening to homeowners and their stories are all the same, it finally dawned on me, there are no loan modifications! Thanks for the support and suggest! :)
11:12pm • #13
324,318 Points 10 Featured Posts Outside Blog Attended Rain Camp

This topic hasn't come up much in my own business since I have stayed clear of anything to do with the words "Short sale" in it. But it's interesting to read everyone's strong negative reaction. What a shame indeed to give false hope to hurting homeowners.
11:21pm • #14
JUN
12
2011
466,370 Points 50 Featured Posts Called Shot Master

Rich, lucky you if you are able to sell only standard sales. Sounds like New Mexico doesn't have any hurting homeowners. Must be the only state in the nation. In California most of the real estate market is short sales. False hope are loan modifications.
1:46am • #15
JUN
13
2011
874,312 Points Outside Blog Called Shot Master

Pamela - It is more profitable for servicers to foreclose on the property than do a loan modification. The lenders got plenty bailout money.
5:12pm • #16


What does the graphic say?
Leave a response…

(optional)
Spam Prevention:
 
Mcsweeney%20farms%20trail Rainmaker_large

Pamela Seley, REALTOR® Call 951.491.4063 | Temecula Valley CA

Pamela Seley, REALTOR®

Temecula, CA

More about me…

Bassett & Associates, REALTORS®

Cell Phone: (951) 491-4063

Email Me

Pamela Seley's Temecula Valley California Real Estate Blog ~ Have a question about buying or selling real estate in Southwest Riverside County California? Call 951.491.4063 Locations of visitors to this page
View Pamela Seley, REALTOR® of Bassett and Associates, REALTORS® Service Area in a larger map


Listings

Links

Archives

RSS 2.0 Feed for this blog